Thailand: Fuel tax may hurt tourism

• Feb 03, 2017

Reflecting industry concerns, the boss of Thai AirAsia (TAA) yesterday warned that ticket prices inflated by the jump in excise tax on jet fuel will have a detrimental effect on domestic tourism.
TAA chief executive Tassapon Bijleveld said passengers flying domestic flights are mostly of the leisure type and are price-sensitive.
“A 100- or 200-baht increase [in ticket price] will have a significant impact on their travel decisions,” he said. “If the government really wants to promote tourism, they have to seriously look at the travel cost of passengers.”
Mr Tassapon was responding to Jan 25’s rise in the excise tax on jet fuel from 20 satang a litre to 4.89 baht.
The increase has led Thai-registered airlines to pass on the burden to flyers, at 150 baht per flight leg on four major low-cost carriers and 200 baht on full-service airline Bangkok Airways starting from Wednesday.
Mr Tassapon pointed out that a TAA air ticket on a domestic route, averaging 1,250 baht per leg, is now comparable to the fare for a flight to Cambodia, Laos, Myanmar or Vietnam.
“From the perspective of a Thai tourist, you can tell where they want to fly,” he said.
According to the Tourism Authority of Thailand, domestic tourists last year increased by 4% from the previous year to 145 million, with tourist spending totalling 866 billion baht, up 8%.
Mr Tassapon said the increased tax, based on current jet fuel prices, translates to 1.5 billion baht in additional fuel bills for TAA this year.
TAA’s fuel bills in the first nine months of last year amounted to 6.1 billion baht.
TAA targeted to carry 19.5 million passengers this year, 12 million of which are expected to take domestic flights.
With the higher tax, fuel now represents 35% of TAA’s operating costs from 33%.

Source: http://www.bangkokpost.com/business/tourism-and-transport/1191733/fuel-tax-may-hurt-tourism